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Dear John,
Two new essays published by the Fraser Institute today find that if the federal government wants to spur entrepreneurship and increase economic growth, it should reform capital gains taxes in Canada.
The first essay, Capital Gains Should be Taxed Nominally, finds that taxing capital gains nominally – that is, taxing the gains without adjusting for inflation – is unfair and leads to arbitrary and inconsistent tax rates.
Put simply, taxing nominal capital gains is akin to taxing fictitious income, which over time leads to less investment, fewer job opportunities, and lower wages and growth. Check out this full essay here.
The second essay - Capital Gain Tax Rollovers - suggests allowing “rollovers” for an entrepreneur or investor to defer capital gains taxes by reinvesting the proceeds from the sale of one asset into a new similar asset within a specific period of time.
The entrepreneur benefits by paying tax at a later date, enabling additional entrepreneurial activities and savings. You can read this second essay here.
Please be sure to share them with your friends and colleagues!
Sincerely,
Niels Veldhuis
President
The Fraser Institute
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